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Home >> Daily News >> Vietnam News >> Economy >> Economic indicators improving in Vietnam
Economic indicators improving in Vietnam
"The country has run up a trade deficit equal to 21.8 per cent of export turnover, slightly above the Government target of 20 per cent, and we continue to expect a healthy surplus in the capital account that will more than compensate for the trade deficit," according to the fund manager's May monthly report, as reported by the Viet Nam News. Inflation continued to ease in May and only registered a monthly increase of 0.27 percent. But this time of year is usually the low season for inflation. With year-to-date inflation standing at 4.55 percent, the Government's recently reduced target of 8 percent seems achievable. In the stock market, all eyes were on Europe as sovereign debt fears threatened to develop into a full blown crisis. This anxiety was reflected in a 13-percent correction of the VN-Index during the first three weeks of May. However, sentiment did improve towards the end of the month as China quashed rumours that its appetite for European debt was wavering, prompting a swift recovery in global indices, including Viet Nam. VAM said the market would remain volatile until investors regained confidence in the global markets, with the State Bank of Viet Nam's monetary policy playing a prominent role in directing the longer-term domestic market recovery. The current market could present good buying opportunities for value investor seeking good stocks at a discount, it said. It recommended investing in real estate, construction materials, pharmaceuticals, and food and beverage companies, and in the banking sector in the run. With the Government's new capital requirement of VND3 trillion ($157.9 million) and recent hike in CAR requirement from 8 to 9 per cent, "an industry consolidation is due in the near – to mid-term, and until that happens, it is hard for banks shares to jump significantly." A large-cap company in the construction materials sector is expected to list in the third quarter following its private placement, which is likely to bring an impetus to the market that has been lacking since deepening global concerns over European the debt risks and political tension on the Korean peninsula.
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